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    Odisha likely to auction Sukinda chromite and Guali iron ore mine

    Synopsis

    Odisha had kicked off the auctions of working mines by first putting two non-captive chromite blocks under the hammer – the Kamarda deposit being mined by BC Mohanty and the Saruabil mine by Misrilall Mines. Both were bagged by a Tata Steel subsidiary at steep bids of 96.8 percent and 88.5 per cent and respectively.

    iron-ore-agencoesAgencies
    Odisha has the largest number of old merchant mines, of the more abundant iron ore and the comparatively scarce chromite, that are set to lapse on March 31, 2020. (Representative Image)
    The Odisha government is likely to auction the Sukinda chromite mine and another working iron ore mine that were being reserve for the state-owned Odisha Mineral Exploration Corporation Ltd.

    A notification to 'de-reserve' is to be issued very soon and the blocks could be advertised as soon as next week, said two officials speaking to ET on condition of anonymity.

    The state’s decision is believed to have stemmed from the recent ordinance by the Narendra Modi government and an unwillingness to delay the resumption of any working mine lapsing in less than three months.

    Odisha has the largest number of old merchant mines, of the more abundant iron ore and the comparatively scarce chromite, that are set to lapse on March 31, 2020. These will find new owners as the country transitions to an auction-only regime that brings to state governments an additional percentage of sale value which a successful bidder commits to in addition to the royalty and taxes that they got earlier. There has been keen interest and participation for the twenty working mines on offer.

    Odisha had kicked off the auctions of working mines by first putting two non-captive chromite blocks under the hammer – the Kamarda deposit being mined by BC Mohanty and the Saruabil mine by Misrilall Mines. Both were bagged by a Tata Steel subsidiary at steep bids of 96.8 percent and 88.5 per cent and respectively. Choosing to reserve for OMECL Tata Steel’s Sukinda chromite mine and RP Sao’s iron ore mine, the state government had already written to the Centre for approval.

    Speaking on condition of anonymity, a government official explained the decision as “a good thing and in the interest of equitable distribution.”
    Several ferrochrome players are depended on Orissa Mining Corporation for their raw material requirement and had lobbied unsuccessfully for all these non-captive chromite mines to be reserved for a PSU.

    Set up initially as a subsidiary of Orissa Mining Corporation, OMECL had been reconstituted to be an independent agency that could also undertake mining. It had even gone ahead and advertised inviting mine operators to run the two blocks.

    Senior officials of the mines department declined to speak on record until a formal decision was taken. One of them said the about-turn was prompted by the Centre’s 10th January ordinance amending the Mines and Mineral Development and Regulation Act. The ordinance extends a seamless transfer of environment and other statutory clearances for a period of two years to the one emerging as the highest bidder. Green clearances granted under the Forest (Conservation) Act and the Environmental Protection Act (and not under the MMDR Act) had until now been considered coterminus with a lease -- a view that the Supreme Court had also upheld in the past. "The ordinance however, makes no provision for a lease reserved for a state PSU despite the fact that the Centre was well aware of our decision to reserve these deposits," said an official who did not want to be identified.

    The state’s earlier decision to reserve the 95.8 million tonne chromite deposit in Sukinda around which Tata Steel has built a neat little township with a small hospital and school had also surprised some in the industry. OMECL, were it to mine the deposit, would have to compensate Tata Steel for its assets and in a few years make a huge investment in converting the nearly 120 meter deep open cast mine into a more expensive underground operation.


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